“To succeed, innovation usually requires pressure, necessity and even adversity; the fear of loss often proves more powerful than the hope of gain,” writes competition expert Michael Porter in examining how world-class technology industries have emerged. As the surviving remnant of small farmers in North America struggles to harness the latest wave of agtech innovations, they are looking beyond conventional farm systems paradigms. From the heartland, farmers are leapfrogging their urban brethren to use the latest capabilities of mobile devices and cloud data systems. They may be pioneering a new mobile app ecosystem for food daa.

The Nestle Purina/Cargill pilot project announced last month presents a snapshot of opportunity that AgIoT offers farmers and also the new operations challenges that it brings. In partnership with the Nature Conservancy, the pilot combines smart weather sensors in crop fields with weather data and irrigation automation, delivering data to field workers and managers in the field.

As US farmers face the fifth year of falling income, agricultural Internet-of-Things (AgIoT) helps farmers tune when they plant, irrigate and harvest. Perhaps most compelling, farmers can share crop data with supply chain partners to strengthen their connection to better ways of selling their crops. According to Cargill, more than 50 percent of water used in US beef production is dedicated to irrigating the row crops that become feed for cattle. “By putting first-of-its-kind, cost-effective irrigation technology in the hands of farmers, the amount of water needed for row crop irrigation is reduced, as is the environmental impact of the beef supply chain,” states Courtney Hall, Cargill technical sustainability manager. “This program could help save 2.4 billion gallons of irrigation water over three years, which is equivalent to roughly 7,200 households over that period,” said Hannah Birge, water and agriculture program manager at The Nature Conservancy.

Today, US Farmers have access to a swelling tide of data– data that can help them grow more with fewer chemicals and water, data that can help them spot disease early. Established industry leaders have joined the growing corps of scrappy start-ups looking beyond the traditional customers to smaller farmers.

Historically, the business of farming had been a story of scale and sophistication. Since World War II, the farmers that invested capital in innovative approaches improved profits and expanded. The agriculture industry focused its innovation on the biggest farms. Today, less than three percent of the two million US farms make more than $1.0 M a year, but they produce more than 42% of total production. Corporate farms, less than one percent of the total, provide an additional 11 percent of US production. Five years ago, precision agriculture was not considered cost-efficient for farms smaller than 5,000 acres. Thanks to a generation of cheaper, more powerful sensors, many of the newest solutions—like Arable Lab’s Mark, CropX, and Taranis, offer affordable precision agriculture to the much larger population of smaller farms.

While million-dollar farms might have a staff to administer data on PCs, small farmers need access to data on the go. Smartphone technology that has emerged over the last decade is enabling farmers to access rich data from mobile devices and record location-specific field information in real time. A recent study of Canadian farmers by research firm Ipsos found that 80 percent use a smartphone, an adoption rate higher than the overall population. Field workers are using mobile devices to input data in real time, while field managers use that data to make decisions—when to irrigate, plant, spray and harvest.

Beyond the scope of these pilots, farmers are struggling to integrate the flood of data into their farm management systems. According to Stratus Ag Research, almost 70 percent of North American growers capture precision ag data, but less than half use software to analyze it. “What began as a slew of single-purpose tools has now evolved to include apps that integrate different types of information to give farmers a ‘dashboard’ view of their land,” notes Kenneth Qin. “With the plethora of technology companies and organizations ready to use farm data, how can farmers protect the information collected from their fields? What if it winds up in the hands of competitors? Could a farmer’s competitive edge in planting practices, fertilizer use or pricing be revealed?” Leading voices in the farm community, like former US Grains Council board member Dale Artho from Wildorado Texas, leery of privacy issues. Artho says that he rejected cloud-based systems like Granular in favor of “spreadsheets and my memory” to build my budgets.

Current agtech industry leaders are engaged in a “land grab” for ownership of the farm management dashboard. However, given the capabilities available today, and the significant premium that supply chain partners can offer for sharing data, might agriculture be ripe for a new app ecosystem? As consumers, farmers are a fragmented market that loves competition and resist centralized control.

“You’ve got a mobile audience that is very attractive,” explains Colin Siren of Ipsos. “They’re heavy users of technology, applications, wireless content — and they are key decision-makers for their business… While farmers are certainly using their mobile devices for social media, banking, news, texting — over 40 percent had downloaded one or more apps related to running the farm.”

• What kinds of data platforms (Amazon, Google, others?) would enable farmers and to monetize their data without ceding control or privacy?
• Would app ecosystems allow technology developers to engage farmers and farm workers to use apps?
• Could this platform use advertising to pay farmers for data?

As American farmers struggle through the fourth year of a historic dip in world grain prices, they’re increasingly looking to urban tech geeks in places like the Silicon Valley for answers. Last week at the Cleantech Forum, agtech leaders gathered to consider what solutions will rise on the 21st Century farm: Wade Barnes from Farmers Edge and Chris Paterson from Bayer Crop Science joined Analog Devices blockchain project lead Rob O’Reilly and Chuck Templeton from S2G Ventures.

Innovations in sensors, communications, and AI are bringing Internet-of-Things (IoT) solutions that were first developed for sophisticated manufacturing to precision agriculture.

Data and communications technologies give farmers access to a flood of data about their farms. Hyperlocal data on moisture, soil, and temperature can help growers increase yield, minimize the use of costly fertilizers and pesticides while giving them the agility to respond to unpredictable weather. The largest and the most sophisticated farms are showing that agricultural technologies raise farm yields and profitability. Retailers and specialty food producers are paying premiums to monitor the status of crops before they are delivered. With these early successes, venture investment in agtech is rising. More money went into funding agricultural technology start-ups last year than the previous two combined, but they continue to be cautious about the potential for selling technology to farmers like those in the US. How many of the 2 million US farms will join the 21st-century agtech revolution?

The battle for the hearts and minds of US farmers will center around helping them get beyond data collection and analysis into action. How can they get beyond a sea of data and get out to their fields? How can they lock in profitable crop sales with data without compromising their operations? According to the latest US census, the largest 10 percent of US farms own more than 70 percent of cropland in the United States; the top 2.2 percent alone takes up more than a third. The tiny three percent of the 2.04 million US farms that are considered large account for 42 percent of the production. Experts estimate that today large farms can extract nearly four times the value of production of major arable crops or principal livestock breeds per acre that small farmers can. Although 75 percent of farms do not generate enough revenue to cover costs, more than 60 percent of the largest farms can boast margins of more than 20 percent.

As agtech companies grow beyond early adopters, their success will depend on how they can help the 97% of farmers battling to survive consolidation. Farmers are looking for data management solutions that seem to match the DNA of Silicon Valley start-ups, bringing complex data streams to streamlined consumer applications like Google Maps, Zillow, Mint or Venmo.

“We’ve created a scalable solution that works for our global network of growers and one that can be tailored to support the needs of individual fields, from grain production in Brazil to variant weather in Australia. Predictive forecasting models are the next step towards achieving higher global crop yields, sustainably,” notes Barnes from Farmers Edge.

For agtech start-ups to succeed, they need to reach beyond the farms with multi-million dollar combines and tractors.

What would be the value of a technology that would provide a single dashboard to help growers get out of the office and into the cab of their tractors? What would it take to bring a mass migration of growers to adopt that platform? Would that opportunity provide the 10x returns on investment that define the sweet spot for venture capital investment?